Are you making the most of your Production Planning module configuration and processes?
Jawad Akhtar, author of Production Planning and Control with SAP ERP joined us to chat about the PP module, Production Planning challenges, and technical issues in our one-hour Q&A. The chat was moderated by Scott Etkin, SCM editor for SAP Experts.
To review the entire Q&A, view chat replay or read the edited transcript here.
Scott Etkin: Hello and thanks to everyone for joining us today for a chat on configuring and fine-tuning SAP Production Planning. As managing editor of SCM EXPERT, I am pleased to have Jawad Akhtar join the chat. Jawad is an SAP Experts technical adviser and an expert in the areas of PP, QM, MM, PM, and DMS with experience in various industries.
Jawad is also author of the new book, Production Planning and Control with SAP ERP. Welcome, Jawad, and thanks for joining us in today’s chat!
Jawad Akhtar: Thank you very much, Scott! It's always a pleasure to interact with readers on any forum to share ideas and tips on improving and optimizing their business processes!
Hello Everyone! :)
Scott Etkin: Jawad, before we dig in to the questions from our readers, I just want to first congratulate you on the new book.
Scott Etkin: Can you talk about one or two big points of confusion about the PP module that you wanted to address – first for those who are just getting started in production planning and the PP module? And then for those who are looking to fine-tune their current production processes?
Jawad Akhtar: Thank you very much again, Scott! It was a massive writing project. But I am very happy with the outcome and the appreciation received so far!
Scott, I think one of the most neglected areas of PP has been the process industries' processes. Also, I think there wasn't any comprehensive resources on many of the optimization tools and resources available for readers to refer to.
I felt that PP consultants and Business process owners often struggled with understanding how PP fits with other logistics and SCM components. So, this book attempts to address these areas. In my 9 years of SAP experience working with diverse clients and industries, it always bothered me that many companies were not utilizing even 50% of the available standard features and functionality that PP component has to offer!
For example, for better planning there's Long-Term Planning (LTP) that can be put to use for all simulated-related planning. Early Warning System (EWS) was another area I felt was highly under-utilized, but so is Classification! All these are cross-modular and can be used by other SAP ERP components too!
Scott Etkin: Thanks again everyone for joining us. Jawad, we, of course, have lots of questions from our readers. I’ll let you get to those now
Jawad Akhtar: Okay, let's get started!
Comment From Guest: Hello, what settings are needed to turn on forecasting in ECC?
Jawad Akhtar: This book is a great expansion to several topics and areas that were previously not covered in a single resource. This book contains configuration and business processes chapters on PP-PI and REM. It contains chapter on reporting tools, and also a chapter on cross-modular integration.
Comment From Vivek: What is the best way of printing released process orders?
Jawad Akhtar: Hello Vivek, I'd use the transaction COPI for this. For discrete orders, I'll use CO04.
Comment From Stephanie: Can you expand a little bit on the EWS functionality?
Jawad Akhtar: Hi Stephanie, EWS, or Early Warning System is a wonderful functionality (and again little used!) that let you set up alerts which are important to you! For example, you want an instant alert as soon as your production scrap reaches 5% of the total production! You want an alert as soon as you seen a negative trend of over 2% in your daily production.
And the good thing about EWS is that you can all set this up yourself, amend it or even delete the ones you no longer need.
EWS is cross-modular, so you can also set up alerts that pertains to other modules/components of SAP ERP.
Comment From Christoph Hupfauf: We are looking for a possibility to perform finite capacity planning in ERP? At the moment we see the only possibility with SAP ERP Add-ons. Is there any plan for the future?
Jawad Akhtar: Hi Christoph, Finite Capacity Planning is a standard functionality and you do not really need Add-ons for this. Even the configuration for CRP (Capacity Requirements Planning) is minimal.
There are two areas of CRP, namely Capacity Evaluation and Capacity Leveling. The first one evaluates when there's any overload. The leveling option helps to 'level-off' the bottlenecks by providing the option to add new shifts, new working days (when normally it's off), or even moving orders to the next days/dates.
Comment From Guest: From the beginning of implementation, how do we know that the company is useful to have process order or order? What is the best for a food company?
Jawad Akhtar: For food industry, I'd recommend to go for PP-PI, as it offers far greater options and functionality to cater to wide range of business processes. However, if the scenarios are not too complex or the reporting and data entry requirements is not too much, then you can go for REM (Repetitive Manufacturing).
There's a comparison table available in the 'appendix' of the book that tell you how to compare different production types, and when to use which one. The table compares Discrete, PP-PI, and REM.
Scott Etkin: Jawad, could you please discuss what settings are required for Forecasting?
Jawad Akhtar: Forecasting is a standard SAP ERP Functionality. You can use it not only to forecast and predict your finished goods, but just about all types of materials. From raw materials to consumable, it helps the planner to predict and plan their production and procurement.
For settings, you just need to "activate' the forecasting view in the material master, make relevant settings and run forecast on an individual material or all materials on the plant.
Comment From Rens : Hi Jawad, Is the book closely related to Dickersbach / Keller or does the content differ a lot?
Jawad Akhtar: Hi Rens, I think I addressed this before. But here's the quick summary.
Yes, this book is a great expansion to several topics and areas that were previously not covered in a single resource (book). This book contains configuration and business processes chapters on PP-PI and REM. It contains chapter on reporting tools, and also a chapter on cross-modular integration.
Comment From Remco Geltink: In one routing it is possible to assign different plants to operations? So for example, in operation 0010 plant EN01 is assigned and in operation 0020 plant EN06 is assigned. When assigning the BOM to the routing, SAP always takes the BOM from the plant for which the header of the routing is created. Is it also possible to assign components from different plants to a routing? So in this example, assign components from plant EN01 to operation 0010 and components from plant EN06 to operation 0020? Thanks for your response.
Jawad Akhtar: Hi Remco, No unfortunately, this is not possible, as system only considers BOM's components for the assigned plant only.
Comment From Rui Dantas: Our BOMs have internal material numbers, so MRP creates purchase requisitions for this internal numbers. However, purchase orders have to be created for the Manufacturer Part Number. Is it possible to automatically determine the MPN when converting PR to PO (and will the MRP situation for the internal material number still be balanced)?
Jawad Akhtar: Hello Rui, I'd consider using a user-exit (which I do know exists) during MRP run to consider MPN for planning and procurement purposes. Your ABAP resource should be able to support you on this.
Comment From Stephanie: Regarding forecasting does the MRP type have to be VV or can you use other MRP types with the forecasting?
Jawad Akhtar: Hi Stephanie, No, the MRP type does not have to be "VV". For using VV as MRP type, you have to first ensure that you run the Forecasting on a material, before you run MRP.
However, to make things easier, you can independently run the Forecasting and MRP, or make partial use of each of the two processes
Comment From Guest: What is the best forecasting method when your business is very seasonal and weather driven?
Jawad Akhtar: Hello Guest, I'd use the Seasonal Forecasting model for this scenario. Also, we must remember that the system offers "Automatic" model selection for forecasting that you can evaluate. Just test the forecasting using "Automatic" model, and see if the results are satisfactory. At the end of the forecasting (using automatic model), the system will incorporate the relevant model (moving average, standard or other), and then you can decide if this best fits your business need.
Comment From Geoffrey: You mentioned it bothered you that many companies were not utilizing 50% of standard SAP PP functionalities. Reason could be that some of these features are unexplored territory. But do you also notice frequently that tools are not used because they do not fulfill the need?
Jawad Akhtar: Hi Geoffrey, what I have noticed is that after initial and mad rush to get SAP ERP implemented, companies often forget that there are many hidden and latent tools that they never used (and were available as standard offering). This is the reason the book focuses on several such processes, tools, functionality.
For example, I have seen very little use of large number of standard SAP Analyses reports and tools. If used, they can give you a deep insight on how far off your planning or other parameters are, including scrap generated during production, the 'additional' cost of producing material etc.
Comment From Stephanie: What transactions are used to run the forecasting as you mention?
Jawad Akhtar: Hi Stephanie, You can use MP30 to run forecast on individual material (after you have made the settings in material master's forecasting view), or you can use MP31 for plant-level Forecasting.
Comment From Guest: Hi Jawad, If all standard fails, what is the best method according to you to find an enhancement? BADI's, etc. Are they covered in your book?
Jawad Akhtar: No, my book massively focuses on using standard tools and functionality. In other words, if you are consultant or even a business process owner transition to SAP consulting, you can independently implement ALL the areas covered in the book, without the need or guidance of any ABAP programmer.
Comment From Manish: Hi Jawad, first of all please accept my congratulations for your new book. My question is towards using XSTEPS both in process and discrete industry. What is your view here?
Jawad Akhtar: Hello Manish, Thank you! Interestingly to use XSTEPS, you need to learn the basics of process management in PP-PI. Once learned, you can use all the knowledge and experience to use highly interactive and user-friendly XSteps, not just in PP-PI but also in Discrete (and that's a great offering for those who scrambled to record relevant information in the discrete industry)!
Comment From Deb: Jawad, as someone who supports a process industry, I can appreciate your comments about the under utilization of LTP. One of our biggest challenges has been getting the master data correct for capacity planning - run rates and utilization rates on the resources. Any tips for making these analysis efforts repeatable and reliable?
Jawad Akhtar: Deb, here again, I'd like you to refer to the Standard Analyses tools available to see how your planning (the capacity planning) data differs from what the system has been recording over the past one year (for example). This let you 'improve' your master data to reflect is closely with your actual and practical situations
Comment From Deb: Are there any chapters or sections devoted to the unique private label manufacturing challenges? Particularly those in the process industry where batch size limitations are in place along with needs to empty a batch across multiple finished goods? We have found that those challenges in particular don't always fit the standard SAP processes for planning and scheduling especially.
Jawad Akhtar: Deb, the chapter on PP-PI attempts to address several of these scenarios, including material quantity calculation, and how it fits with Batch Management. However, I'd recommend to coordinate with MM resource to ensure batches' splits are in place.
Comment From Swathi: Master data like routing, bom and versions are created on system time. But production order creation is based on user date and time. Why is SAP doing this? Because of this I will have to wait until 6 hours after my master data is created to create a production order and successfully pick the valid production version..
Jawad Akhtar: Hi Swathi, Sorry it took me a while to come back to you! Well, I am not sure what exactly are you doing for the system to behave it this way, otherwise, the moment the right master data is in place, you can immediately use it. However, I'd highly recommend to pay close attention to "valid from" date while creating master data, as this may possibly be the cause of the delay.
Comment From Rui Dantas: Can MRP be configured so that reservations (from production / process orders) are considered, but dependent requirements (from planned orders) are not?
Jawad Akhtar: Rui, yes you can certainly do this. You just need to make relevant settings not just in the highest material level, but also the lower levels of materials.
Comment From Rens: Hello Jawad, you say that a lot of forgotten reports are not used by companies. Could you demonstrate 1-2 concrete examples of reports that are great but often overlooked?
Jawad Akhtar: Rens, I'd give one example (although it relates more to MM than PP). It is Planned Delivery Time Calculation report (Transaction WPDTC). It gives a comprehensive visibility on various planned delivery times maintained in the system and how it differs from actual GR dates
I'd also recommend exploring the SAP menu, Logistics > Logistics Controlling
Here you'll find massive list of not just PP reports/analyses but other modules also, all placed at one single location for easy working
Comment From Deb: Would the forecasts generated for lower-level materials push to MRP? Or are they informational only?
Jawad Akhtar: Hello Manish, Yes, I agree to an extent. But then, SAP offers workaround like creating separate order types for rework, using order without defining/assigning the material and linking it to the main production/process order. Finally, you can add 'new' operations in the production order to account for rework
Comment From Manish: Dear Jawad, I always felt that sap PP is not very strong towards Rework scenarios. What is your view here?
Jawad Akhtar: Hello Manish, Yes, I agree to an extent. But then, SAP offers workaround like creating separate order types for rework, using order without defining/assigning the material and linking it to the main production/process order. Finally, you can add 'new' operations in the production order to account for rework involved.
Scott Etkin: That wraps up today's Q&A. Thank you everyone for joining us today. And Jawad, thanks for taking these questions.
Jawad Akhtar: Thank you very much from my side too! I am happy to be here! You can certainly send me your questions on firstname.lastname@example.org, follow me on twitter @jawadhl, or add me on LinkedIn (and I'll certainly add you to my professional network!)
Scott Etkin: For more tips from Jawad, you can read his SCM EXPERT articles on everything from dealing with scrap components in production planning, leveraging batch derivation, using planned delivery times and configurable material to optimize your procurement process to integrating QM into PP processes.
You can learn more about his book Production Planning and Control with SAP ERP at the SAPinsider Bookstore. Thanks again.